AMC unloads Mexico's Cinemex

Exhibitor sells to Entretenimiento GM de Mexico

MEXICO CITY -- Theater chain operator AMC Entertainment has reached an agreement to sell its subsidiary, Mexico City-based exhibitor Cinemex, to Entretenimiento GM de Mexico for $315 million.

Entretenimiento GM de Mexico, operator of 900-plus screens under the brand name MMCinemas, is Mexico's second largest theater outfit. With the addition of nearly 500 Cinemex screens, MMCinemas will provide stiff competition for market leader Cinepolis.

The deal with Kansas City-based AMC requires approval from Mexico's Federal Competition Commission. AMC Entertainment said in a recent SEC filing that the agreement provides for its equity holders and Cinemex stockholders to receive $315 million decreased by the net funded indebtedness of Cinemex, which was $77.5 million at the end of September.

Cinemex, which operates 493 screens primarily in the Mexico City metropolitan area, drew interest from Cinepolis and from several private investment firms.

Founded in 1994 by three enterprising Harvard graduates, Cinemex revolutionized the moviegoing experience in Mexico with theaters featuring stadium seating, wall-to-wall screens and digital sound.

Should the deal get regulatory approval, as expected, it will leave the Mexican exhibition sector concentrated with three major players: Cinepolis, MMCinemas and Texas-based Cinemark.